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More information Summary of State Policy Choices (HTML or PDF) Tables on states' use of options (PDF)

Major Changes Ahead in State Medicaid Policy

Report Explains State Choices Under Federal Law

March 20, 2008--The Deficit Reduction Act, enacted early in 2005, makes the most significant changes to Medicaid since the program began in 1965.

For the first time, states have the authority to separate the Medicaid population into different groups and provide different benefits to each group. They may increase cost-sharing for some groups considerably above previously allowed levels. They must engage in complicated and time-consuming processes to verify the citizenship of many people applying for Medicaid. And they face new statutory constraints on some covered services.

These and other provisions could have grave consequences for low-income adults and children who need mental health services.

At the same time, the DRA gave states options to expand children’s eligibility so as to address, to some degree, the problem of parents giving up custody to obtain mental health services for their child and also to furnish a broad range of home- and community-based services without having to obtain a federal waiver.

Finally, the DRA created several demonstration programs to test potential future changes to Medicaid, two of which are relevant for people with mental illnesses.

See a summary of the DRA.

The Bazelon Center recently completed a study of how states have reacted to the various new options available to them--both those that can improve the lives of people on Medicaid and those that might have negative consequences--and created nine tables covering each important state option. A summary of this study is available in HTML and PDF formats and the tables, in PDF.